Plaintiffs frequently seek to certify class actions where the proposed classes contain a significant number of uninjured persons.  The First Circuit recently reversed the certification of such a class in In re Asacol Antitrust Litigation, concluding that a class cannot be certified where the “individual inquiries” necessary to resolve whether each class member has suffered an injury-in-fact “overwhelm common issues.”  When such inquiries are needed to ensure that a defendant’s due process and jury trial rights are honored, a plaintiff cannot satisfy Rule 23(b)(3)’s predominance requirement.  The court also rejected the plaintiff’s proposal to outsource these individualized inquiries to claims administrators.

We discuss the opinion in detail after the jump, but here are key takeaways for busy readers:

  • The decision explains why a proposed damages class likely fails the predominance test—and therefore cannot be certified—if there are more than a negligible number of uninjured class members and there is no administratively feasible way to weed out those uninjured class members without individualized inquiries.
  • The use of affidavits by class members to establish injury (or any other element of their claim) does not suffice to avoid individualized inquiries so long as the defendant plans to contest those affidavits, because a class cannot be certified on the premise that a defendant will not be entitled to challenge a class member’s ability to prove the elements of his or her claim.
  • Policy justifications for consumer class actions cannot relax the requirements of Rule 23 or defendants’ due process and jury trial rights.

Continue Reading First Circuit Reverses Class Certification Where Individualized Inquiries Would Be Required To Identify And Exclude Uninjured Class Members

Over the past few years, the Supreme Court has heard several cases involving class action procedure, including China Agritech, Inc. v. Resh; CalPERS v. ANZ Securities, Inc.; and Microsoft Corp. v. Baker. Today, the Supreme Court continued this trend, granting review to decide whether Rule 23(f)’s 14-day deadline to file a petition for permission to appeal an order granting or denying class certification is subject to equitable exceptions.  Nutraceutical Corp. v. Lambert, No. 17-1094.

Continue Reading Supreme Court Will Review Whether Rule 23(f) Deadline To Appeal From Class Certification Orders Is Subject To Equitable Exceptions

We have repeatedly discussed in this space the ongoing debate among the federal courts about ascertainability—a red-hot topic in class action litigation these days. (For a more detailed look at our views on the ascertainability doctrine, see the amicus brief (pdf) that we filed on behalf of the National Association of Manufacturers in support of a pending cert petition.) That topic—and the debate among the lower courts—shows no sign of slowing down, as evidenced by new decisions issued by the Second, Sixth, and Third Circuits over the past two months. The central takeaway from these decisions is that while ascertainability is not a panacea for defendants facing consumer class actions, the doctrine (or variations on the ascertainability theme) should help defeat class actions in many circuits when class members cannot be identified without individualized inquiries.

Continue Reading Making sense of the cascade of appellate decisions on ascertainability

The U.S. District Court for the Central District of California recently issued an interesting decision (pdf) denying class certification in 15 consolidated consumer class actions against the maker of 5-hour ENERGY drinks.

Continue Reading Court refuses to certify 5-hour Energy false-advertising class action for lack of common proof

Today’s decision by the Supreme Court in Microsoft Corp. v. Baker puts an end to a tactic used by plaintiffs in the Ninth Circuit to manufacture an immediate appeal of an order denying class certification. When a federal district court grants or denies class certification, Federal Rule of Civil Procedure 23(f) allows the losing party to ask the court of appeals for permission to appeal immediately. Otherwise, the parties must litigate the case to a final judgment—the named plaintiffs’ individual claims if certification has been denied, or the class claims if certification has been granted—to obtain appellate review of the district court’s class certification determination. But the Ninth Circuit created an exception to this rule by authorizing a plaintiff who has had class certification denied to dismiss his or her individual claims with prejudice and then file an appeal from that self-generated judgment.

After the oral arguments in Baker, it seemed likely that the Supreme Court would reject that exception. And that is exactly what the Court decided today. Much more interesting is how they got there: Although all eight participating Justices agreed on the outcome, they took different approaches to the question presented. Continue Reading Supreme Court rejects end runs around Rule 23(f) by use of “voluntary dismissal” tactic

Earlier today, the Supreme Court heard oral argument (pdf) in Microsoft Corp. v. Baker, a case that raises complicated questions about federal appellate jurisdiction and Article III standing, but ultimately involves an important practical question in class action litigation: Can a named plaintiff engineer a right to an immediate appeal of the denial of class certification by voluntarily dismissing his or her claims with prejudice and appealing from the resulting judgment?

From the argument, it was clear that a number of Justices believe that the answer should be “no.” As Justice Ginsburg pointed out several times, the committee charged with amending the Federal Rules of Civil Procedure crafted Rule 23(f) to give courts discretion to decide whether to allow immediate appeals of orders granting or denying class certification. But plaintiffs maintain that they should be free to challenge the denial of certification immediately by appealing from what their counsel described as a “manufactured final judgment.”  In other words, as Justice Ginsburg put it, “any time … that a class action is brought against a corporation, [Rule] 23(f) is out the window.”

As discussed below, there are many ways in which the Court could decide the issue. That said, businesses should be cautiously optimistic that the Court will reverse the Ninth Circuit and thus reject a dysfunctional regime in which class-action plaintiffs can appeal the denial of class certification while defendants remain able to appeal orders granting class certification only by grace.

Continue Reading Supreme Court Hears Arguments In Microsoft v. Baker To Address When A Named Plaintiff Can Appeal The Denial Of Class Certification

Can you have a class action if class members can’t reliably be found? That question is at the heart of the debate over ascertainability—one that has divided the federal courts. Earlier this week, the Ninth Circuit weighed in, holding in Briseno v. ConAgra Foods, Inc. (pdf) that plaintiffs need not demonstrate “an administratively feasible way to identify class members [as] a prerequisite to class certification.”

That conclusion is disappointing.

Continue Reading Ninth Circuit rejects meaningful ascertainability requirement for class certification, cementing deep circuit split

330px-Supreme_Court_Front_Dusk-150x120.jpgA peculiar thing happened after the Supreme Court announced its decision in Spokeo, Inc. v. Robins (pdf) on Monday.

Even though the Court ruled in favor of Spokeo—vacating the Ninth Circuit’s ruling that the plaintiff had standing to sue and holding that the court of appeals had applied a legal standard too generous to plaintiffs—both sides declared victory. (Full disclosure: I argued on behalf of Spokeo in the Supreme Court.)

Spokeo tweeted:

Jay Edelson,

What’s going on?

Continue Reading Plaintiffs’ Lawyers Try to Spin Spokeo

Under Federal Rule of Civil Procedure 23(b)(3), a court may certify a suit for damages as a class action when “there are questions of law or fact common to the class” that “predominate over any questions affecting only individual members.” Similar certification standards apply when a plaintiff seeks to certify a collective action under the Fair Labor Standards Act (FLSA). Yesterday, in its highly anticipated decision in Tyson Foods, Inc. v. Bouaphakeo (pdf), the Supreme Court affirmed the certification of an FLSA collective action where the evidence tying class members together was a study of a representative sample of similarly situated workers.

Continue Reading Supreme Court affirms certification of FLSA collective action in Tyson Foods, Inc. v. Bouaphakeo